A friend of yours comes and tells you to invest in silver. How would you respond to that? For people who are unaware of how important is silver, this may sound unusual. However, for investors that know the secrets of alternative investments silver represents a golden opportunity for profit as it used worldwide from many major industries and prices are rising day by day.
Despite market volatility causing many investors to be worried, it is no wonder that some are looking for alternative investments. These funds are outside the stock and bond realm. In many cases, they are not directly correlated with stock and bond markets, which, especially in times of volatility, may make them attractive.
Like other precious metals, silver can be used as an investment. For more than 4,000 years, it has been considered a form of money and store of value, although it lost its position as a legal tender in developed countries when the use of the silver standard came to an end in 1935. Nevertheless, several countries mint bullion and collector coins, such as the nominal face value American Silver Eagle. The key market for silver in 2009 was for industrial applications (40%), jewellery, bullion coins, and exchange-traded goods. The world’s silver reserves stood at 530,000 tons in 2011.
Speculation and supply and demand drive the price of silver, like most commodities. Thanks to the smaller market, lower market liquidity and variations in demand between industrial and store quality uses, the price of silver is notoriously volatile compared with that of gold. This can sometimes contribute to wide-ranging stock valuations, generating uncertainty. The price of the silver market is much smaller than the gold market. The market for gold bullions in London is 18 times more monetary than silver. Despite physical demand projected at just $15.2 billion per year, a major trader or shareholder may be able to positively or negatively affect the silver price. Large banks such as Morgan Stanley are influencing the silver market creating an apparent shortage of above-ground silver available for investment. As silver continues to boom for industrial uses, less of the metal is available for physical bullion for investment. That, coupled with paper investment uncertainty, has driven the market prices wildly.
Silver prices have risen steadily since the beginning of the 21st century, catching the attention of many investors. Most people look at precious metals like silver to help protect themselves from the continued devaluation of the U.S. dollar (or other fiat currencies) and stock market volatility. Some traders, also referred to as “preppers,” claim that in the event of an economic collapse, silver will play a key role in trade and bartering.
In many different forms, Gold is eligible for investment, including gold paper and silver bullion. Most generally, actual silver bullion is sold in the form of coins, rounds and bars with various size options. Some investors enjoy owning government-minted coins while others prefer to pay lower premiums for rounds and bullion bars. In any case, this investment vehicle offers a vast amount of options. “Paper money” is available in the form of ETFs and certificates as well as bullion. Such choices vary from actual silver bullion in the sense that the owner never gets the silver in his pockets. A silver ETF or certificate is simply a piece of paper that says a bank or financial institution keeps for you a specified amount of silver without you ever seeing that money.
Do you want to make your portfolio more diverse? Silver and other precious metals hide many opportunities for you to grow your wealth. Find the way and invest in silver to grow your wealth.